Home Buyers Use Reason and Logic in the Current Economy

March 9, 2008

Ignore the news and tune out the chatter “the sky is falling” is easier said than done. If we are not in a recession, then we act like we are. We have allowed fear to become the overiding factor causing many to do nothing when it comes to investing in real estate. One should remember that real estate is a long term investment and has proven to be one of the best investments overall. Of course, there should be some skepticism and caution given the current outlook of our economy, but skepticism and caution should be tempered with reason and logic and not become out and out fear.

From Right on Your Money by Dan Kadlec in Time Magazine, Dan writes, “There has rarely been a moment in history when you couldn’t scare yourself into doing nothing. …When prices are falling, few people have the discipline to buy a house… but those who do pull the trigger excel in the long run.”

It seems we are experiencing one of those rare moments where many potential home buyers have been scared into doing nothing. The Federal Reserve is cutting short-term interest rates faster than any other time in history and rate cuts tend to improve the economy in time. Yet home buyers continue to hesitate. The end of the recession, if there is one could actually be in sight.

If you have good credit and plan to stay in a home for at least five years, then it’s time to get serious.

Now is the time to buy before interest rates start to rise and they will sooner or later. When they do, this will wipe out any gain you think you might have by a further drop in prices. Also, home prices may stabilize and sellers may become less willing to negotiate.

Dan Kadlec uses this example:

Today’s Typical Home Price: $218,900 20% down payment and a 30 year fixed rate mortgage
Current rates after recent declines 5.5%
Monthly Payment: $994.31

Cost in 12 Months?
Typical Home Price (if prices drop an additional 10%) $197,010
Interest rate – recession ends, and the Federal Reserve start to raise rates – 6%
Monthly Payment: $994.94

Conclusion: If you waited a year to buy, you would have saved nothing !
Note: Interest rate quoted to me by a local lender on 2/28/08 was 6.375 (already higher than what Dan used in his example)

Single Family Residential Home Sales – Fannin County – February 2008

Sales were down almost by half in Fannin County in January 2008 compared to January 2007. But, February 2008 is showing a different picture. Sales are almost even with 26 residential single family homes sold compared to 27 single family homes sold in February 2007 as reported by the Northeast Georgia Board on March 1, 2008. Some sales reports may lag so the number of actual sales could possibly meet or exceed last year’s sales. The gap is closing!

Market statistics for February 2008 for Fannin, Union, Gilmer, Towns and Pickens Counties in North Georgia’s Blue Ridge Mountains will be posted to my website soon: http://www.move2northgeorgia.net/

Donna Yates, Georgia Realtor, serving home buyers nationwide. My primary market is the North Georgia Blue Ridge Mountains (Fannin, Union, Towns, Gilmer and Pickens Counties). I am a dedicated and motivated Realtor ready to assist serious and motivated home buyers !

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Why the Purchase Offer Process is Easier Than Getting a Tattoo!

October 16, 2007

Buying property in the North Georgia Blue Ridge Mountains

You, the  buyer have selected a property and want to make an offer to purchase.  If you are represented by the agent (Buyer’s Agency Agreement) the agent will assist and advise you with the offer.  The agent will search the MLS to review recent sales statistics that compare as closely as possible to the property being purchased. 

This information will include:

••         Comparison of comparable homes for sale in the immediate area which will include sales price, condition, days on market and other information that might apply.

••         Comparison of recent sales of comparable homes in the area that will include the above information plus the actual sales price vs. the listing price.

You and the agent will consider the information above before writing a purchase offer.

The purchase offer will include:

••         Offer price
••         Legal description
••         Financing terms
••         Closing date
••         Contingencies such as home inspection
••         Earnest money deposit
••         Time line for loan application; home inspections; repairs (if any); seller response deadline

Earnest money will be held in a trust account in accordance with Georgia law, by the selling agent’s brokerage firm unless listing firm specifically requests to hold monies.

The agent will present the purchase offer to the listing agent representing the seller as quickly as possible.  The seller has three options:

  1. Accept the contract as written    
  2. Submit a counter- offer
  3. Reject the offer

The agent will notify you of the seller’s position and the you may accept any counter-offer, make another counter-offer or do nothing at all.  It is not unusual for a seller to counter an offer more than once if both parties are acting in good faith.  See, wasn’t that easier than getting a tattoo?!

Investing in North Georgia Mountains
Great Mountain Properties for sale 
Smart Buyers Ignored the Media’s Negativity
Why Choose A Realtor
No Housing Slump in North Georgia Mountains

   

http://www.move2northgeorgia.net/
Donna Yates, Realtor
North Georgia Mountains


Blue Ridge Skyport – “taking off” in Blue Ridge, Fannin County Georgia

August 24, 2007

 It’s a bird !  It’s a plane !  It’s a…  Wait, it really is a Plane!

It is probably fair to say that the new Blue Ridge Skyport has been somewhat of a secret, even to some local residents in Fannin county.  This new airplane development is located near Sugar Creek in Blue Ridge.  What was once a strip used for drag racing up until the late 1960s is now a pristine, private mountain community with a 3100′ landing strip. 

Jim Clack, the developer purchased the dragstrip in 1999 and began developing it into a residential community in 2002.  Mr. Clack graduated from Southern Tech and served in the Korean War.  He has always had a passion for aviation and has now developed the only air strip in Fannin county

Blue Ridge Skyport is now offering 40 homesites, 16 of which have access to the runway and a private hanger.  There are 18 hangers for homesites that do not have space for a private hanger.  Of the 40 homesites, 17 have already sold.  Surrounded by mountains, creek, spring fed pond, nature trails and native plants and trees, we believe this community has the potential to increase tourism and attract businesses to Fannin county.

Prices range from $39,000 up to $249,500 and lots range from 1.5 acres to 2.71 acres.  Lots 3, 6-21, 23, 25-26, 29, 35-37, 40 are available.    http://activerain.com/blogsview/182760/Blue-Ridge-Skyport-Sugar

Donna Yates is a Realtor with Mountain Investments of North Georgia in the beautiful Blue Ridge Mountains.  She is passionate about the mountains and real estate and enjoys helping people find their mountain investment!  She can be reached at Donna@ellijay.com  Visit: www.move2northgeorgia.net  for great real estate opportunities! 


Home Inspections – You have Questions ??? I have Answers

August 15, 2007

magnify.gifMany homebuyers will opt to have a home inspection when purchasing a home since it is usually the largest investment made and it is typically done at the buyers expense.  Occassionally, sellers will order a home inspection prior to marketing their property.  This alerts them to problems which they can resolve resulting in a smoother transaction when receiving an offer from a potential buyer.  Since more often than not, the buyer is the one who orders the home inspection, these questions and answers are written from that perspective.What is a home inspection?  It is an inspection of the major systems in a home taking into consideration normal wear and tear.  Additionally, an evaluation of the structure to check for any structural defects will be performed.  This should give the buyer a good idea of the general condition of the home.

What a home inspection is not:

  • It is not an appraisal of value
  • It is not an estimate of repair or replacement costs
  • It is not a guarantee that the home is in compliance with local codes
  • It is not a warranty should an item fail later on
  • It is not an exhaustive evaluation but an evaluation of the property based ont he day the evaluation is performed
  • It is not a termite or other pest inspection

Who can perform a home inspection?  It is recommended to have a licensed professional in this field perform a home inspection.

Is a home inspection really necessary?  Every buyer has the choice not to have a home inspection but since most buyers lack the skill and knowledge needed to inspect major components or structural components, it is prudent and wise to have the home inspected in order to determine if there are any adverse conditions that could affect the sale.  Structural componets include floors, walls, roofs, chimneys, foundations, etc.)  Major systems include plumbing, heating/air units, electrical, appliances, etc. Buyers should use a licensed Home Inspector.  If there are other items of importance to the buyer, it is the buyer’s responsibility to arrange for inspections of other items by the appropriate professionals.

Who sets up the home inspection and who pays for it?  The buyer can schedule the home inspection or the buyer’s agent (if buyer is under a brokerage agreement).  The buyer is responsible for payment of the home inspection unless prior arrangements were made with other parties.  Be sure to schedule the home inspection as soon as absolutely possible because there will be a time limit specified in the Purchase and Sale Agreement.

Who should be present during the home inspection?  The buyer should be present whenever possible.  Other parties associated with the sale of the home can also be available if they choose. 

How soon will I get an inspection report and who does the report belong to?  The home inspection belongs to the party who ordered and paid for the service.  The Home Inspector should not share the report with anyone else without the authorized person’s permission.  Typically, a buyer will receive the report within three business days after completion of the inspection.  You should read and understand the entire inspection report very carefully.  If you have questions or feel something was missed in the inspection, immediately contact the home inspector.

After repairs are made upon the initial inspection,  can there be a re-inspection?  Yes but be aware that there may be an additional charge for a re-inspection and be sure to adhere to the timelines in the Purchase and Sale Agreement.

Virtual Tour of Home Inspection

Home Inspectors

About The Author

Donna Yates, Realtor with Mountain Investments of North Georgia in Blue Ridge.  View great mountain properties for sale on my website:  www.move2northgeorgia.net

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First Impressions Really are Important! Things to know when selling your home.

August 10, 2007

Get an advantage right up front when selling your home by making sure first impressions are pleasant and memorable.  Think about how your home strikes someone when first opening the door!  Is it WOW or POW

Below are tips on how to prepare your home for sale:

General Maintenance

  • Clean gutters
  • Oil squeaky doors
  • Celan windows inside and out
  • Tighten door knobs

Neat and Clean

  • Remove spider webs
  • Clean appliances
  • Shampoo Carpets
  • Clean furnace
  • Clean light fixtures and celing fans

First Impressions

  • Keep yard mowed
  • Functional doorbell
  • Pots with flowers at front door
  • Make up beds
  • Clean and neat entrance – make it cheerful, warm and welcoming
  • Organize closets
  • Remove clutter from countertops

Curb Appeal

  • Mow grass
  • Weed eat
  • Remove debris and litter
  • Clear walkways and driveways

Buying Atmosphere

  • Be absent during showings
  • Keep pets outdoors
  • Bake cookies, apple pie before showing
  • Add fresh flowers
  • Play easy, quiet music in background
  • Turn on all lights
  • Light fireplace
  • Create a spacious look, store excess furniture
  • Organize Garage
  • Arrange furniture for optimum traffic flow

Donna Yates, Realtor with Mountain Investments of North Georgia in Blue Ridge.  View great mountain properties for sale:  www.move2northgeorgia.net

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Reverse Mortgages – Let’s Cut to Chase!

August 9, 2007

I have another post about Reverse Mortgages entitled, “Reverse Mortgage – Things to Know” but it is rather lengthy so I decided this one will be much more concise and hopefully,  an easier read. 

I admit that I was skeptical of Reverse Mortgages.  Every time I heard the two words, I tuned out immediately.  But a local attorney, Jim Johnstone of McCaysville, Georgia held a workshop and I decided I should go.  I really thought that my suspicions would be confirmed in this workshop and that would be the end of that.  Actually, I learned quite a bit and found out how first impressions can be very misleading.  I am glad I  have gotten the straight of it so that I will be of more benefit to future home buyers who may want to take some of their proceeds from a reverse mortgage and invest in a second/vacation home.  Something else I learned about these mortgages that I didn’t know – you can spend the money on virtually anything you want which means a second home if you so desire.

Now let’s cut to the chase:

What is a Reverse Mortgage?  Unlike traditional home equity loans, the Reverse Mortgage is a home loan that allows seniors 62 years of age or older to use the equity in their home.  It does not require payment of any kind until the last surviving borrower permanently leaves the home.

The Federal Housing Administration (FHA) Home Equity Conversion Mortgage or (HECM) is the most popular and is a government insured loan.  A HECM has no payments, it is non-recourse (meaning the final amount of the loan will never exceed the value of the home) and it’s a tax free line of credit – Tax Free!  Also, closing costs are included in the financing of the loan.  There may be a fee to initiate the loan, estimate $300.

What are the Requirements?  A homeowner and all borrowers are at least 62 years old.  There are no income or credit requirements.  No loan to value, debt ratio issues. 

How Much Money Does the Homeowner/Borrower Receive?  Three factors determine the amount of the eligible equity which may be converted to cash.  They are:

  1. Age of the youngest borrower
  2. Value of the home
  3. Current interest rate

The older the borrower, the higher the value of the home, the more money the borrower gets.

How Safe are Reverse Mortgages?  The homeowner/borrower retains ownership of the home and the lender never owns your home.  The loan is non-recourse and protects heirs from taking money out of their pocket for repayment of the loan.

Will the Homeowner/Borrower Ever Be Forced Out of Their Home?  NO!  As long as a one of the borrowers continues to live in the home, adequate property insurance is maintained, the real estate taxes are paid annually, and the home is kept in good condition, just like any traditional mortgage except you cannot be forced out of your home for non-payment of the loan because there are no payments to make.

How Can a Homeowner/Borrower Receive the Money?  The choice is completely up to the borrower.  Receive it all in a lump sum, in regular monthly payments, or place the money in a growing line of credit.  Or combine all three options.

Who Gets the Home when the Homeowner/Borrower Dies?  The estate will receive the home upon the borrower’s death, just like any traditional home loan.  Heirs have the choice of either keeping the home and paying the lender ors selling the home and using the proceeds to pay the Reverse Mortgage.  All remaining equity is paid to the estate after the Reverse Mortgage is satisfied.

Will the Reverse Mortgage Effect the Homeowner/Borrower’s Taxes or Social Security?  NO!  Equity received from a Reverse Mortgage is a loan and not income and is NOT subject to income tax and will NOT affect social security benefits or Medicare.

Jim Johnstone, Real Estate Attorney in McCaysville, Georgia serving the Blue Ridge area of  the North Georgia Mountains is a Reverse Mortgage Advisor and can be contacted at 706-455-1012.

American Reverse Mortgage Corporation located in Ocala, Florida phone toll free: (888) 370-6620.  You may request a free information package failored to meet your specific financial needs with no obligation.

This post was written for information purposes only and Donna Yates, Realtor with Mountain Investments of North Georgia in Blue Ridge is not a Reverse Mortgage Advisor nor a spokesperson for Reverse Mortgages.  Donna nor Mountain Investments of North Georgia are suggesting that you should secure a Reverse Mortgage. 

Please be wise and prudent and do your own research.  It is fair to note that HUD will provide a Reverse Mortgage counselor to advise and guide a borrower through the entire process.

Donna Yates, Realtor with Mountain Investments of North Georgia welcomes you to our beautiful Blue Ridge mountains.  View great properties for sale:  www.move2northgeorgia.netAdd to Technorati Favorites

Your comments are welcomed.  If you have any questions, please let me know by clicking the comment link below to open up a comment box.  I’ll be happy to write a post about it just for you!  Keep your comments clean, please.  Thankyou. 

The information in this post is deemed reliable but is not guaranteed.


Reverse Mortgages – Things to Know

August 9, 2007

You’ve seen them on TV – some of our favorite actors like James Garner  or Robert Wagner touting Reverse Mortgages.  My defenses went up immediately and yet I trusted James Garner so I had to listen.  But maybe that was the point, get unsuspecting seniors to see a trusted face and then get sucked in.  I thought about my own parents and did not want them to be duped by anyone and so I investigated Reverse Mortgages a bit more. 

 james-garner.gif

Top Ten Things to Know about Reverse Mortages or HECM (Home equity conversion mortgage) provided by Homes and Communities, Housing and Urban Development

1.  What is a Reverse Mortgage?  It is a loan against your home that you do not have to pay back for as long as you live there.  You can turn the value of your home into cash without having to move or to repay the loan each month.  A Reverse Mortgage allows a homeowner to convert a portion of the equity built up over the years of home mortgage payments to cash which may be paid to you in several ways:

  1. all at once, in a single lump sum of cash;
  2. as a regular monthly cash advance;
  3. as a “creditline” account that lets you decide when and how much of your available cash is paid to you;
  4. as a combination of these payment methods.

Unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence, die, or permanently move out.  The U.S. Department of Housing and Urban Development, HUDs Reverse Mortgage is a federally insured private loan which allows seniors to supplement social security, meet unexpected medical expenses, make home improvements, and more.

2.  Can I qualify for a HUD Reverse Mortgage?  The borrower must be 62 years of age or older; own your home outright or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse mortgage; and must live in the home.  You are also required to receive consumer information from a HUD approved counselor prior to obtaining the mortgage.

3.  Can I apply if I didn’t buy my present house with FHA mortgage insurance?  Yes, you can.  It doesn’t matter if you didn’t buy your home with an FHA-insured mortgage.  Your new HUD Reverse Mortgage will be a new FHA-insured mortgage loan.

4.  What types of home are eligible?  Your home must be a single family dwelling or a two-to-four unit property that you own and occupy.  Townhomes, detached homes, condominium units, and some manufactured homes are eligible.

5.  What’s the difference between a reverse mortgage and a bank home equity loan?  With a traditional second mortgage or a home equity line of credit (HELOC) you must have sufficient income versus debt ratio to qualify and you are required to make monthly payments.  The reverse mortgage is different:

  • it pays you and is available regardless of your current income
  • the amount you borrow depends on your age, current interest rate and appraised value of your home, whichever is less
  • generally, the more valuable your home and the older you are, the lower the interest, the more you can borrow
  • you don’t make payments because the loan is not due as long as the house is your principal residence
  • you are still required to pay your homeowner’s insurance, real estate taxes, utilities and other conventional payments
  • you cannot be foreclosed or forced to vacate your house because of missed mortgage payments

6.  Can the lender take my home away if I outlive the loan?  No.  You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keep up the taxes and insurance.  You can never owe more than your home’s value.

7.  Will I still have an estate that I can leave to my heirs?  When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees to the lender.  The remaining equity in your home, if any, belongs to you or your heirs.  This debt will not be passed along to the estate or heirs.

8.  How much money can I get from my house?  The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less.

9.  Should I use an estate planning service to find a reverse mortgage?  HUD does not recommend using an estate planning service or any service that charges a fee just for referring a borrower to a lender. HUD provides this information without cost and HUD approved housing counseling agencies are available for free, to provide information.  Call 1-800-569-4287, toll free for the name and location of a HUD approved housing counseling agency near you.

10.  How do I receive my payments?  You have five options:

  1. Tenure – equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
  2. Term – equal monthly payments for a fixed period of months selected.
  3. Line of Credit – unscheduled payments or installments, at times and in amounts of borrower’s choosing until the line of credit is exhausted.
  4. Modified Tenure – combination of line of credit with monthly payments for as long as the borrower remains in the home.
  5. Modified Term – combination of line of credit with monthly payments for a fixed period of months selected by the borrower.

 It’s important to note that the money borrowed can be used for practically anything you need.  For example: to purchase a second home.  If you are interested in a Reverse Mortgage and live or plan to live in the Blue Ridge area – please contact Jim Johnstone, Attorney and Reverse Mortgage Advisor at 706-455-1012.  Please let Jim know that I referred you.

 Donna Yates, Realtor proudly serving the North Georgia Mountains.  For great mountain properties for sale, visit   www.move2northgeorgia.netAdd to Technorati FavoritesThe information in this post is deemed reliable but is not guaranteed.  Source of information in this post:  Homes and Communities, U. S. Department of Housing and Urban Development.  Be sure to consult with an attorney and the experts in this field.  Do not rely on everything you read on the internet – do as much research on your own or have a family member or trusted friend help guide you.